The government will provide equity loans to cover up to 40% of the price of homes in London, under an extension of the Help to Buy scheme unveiled by George Osborne today.
The move, announced in the chancellor’s autumn statement, will see the launch of a new London Help to Buy scheme that will increase the support offered by government under the existing Help to Buy scheme from 20% to 40% of the price of a home for London buyers from 2016.
Under the scheme buyers will need to contribute at least 5% of the property price as a deposit, and then government will provide an equity loan for up to 40% of the price – with buyers then requiring a mortgage for the remaining 55%.
The chancellor also confirmed plans for a major new house building drive, with the house building budget doubled to £2bn per year in a bid to hit a target of building 400,000 homes by 2020.
Osborne also announced that current restrictions on those who can buy a home through shared ownership would be removed from April 2016.
Currently, homes for shared ownership are allocated in different ways, including criteria set by local councils, but the chancellor’s move will mean anyone who has a household income of less than £80,000 outside London, and £90,000 inside London, can buy a London home through shared ownership.
The scheme will allow people to buy between 25% and 75% of a home, and ensure that the rent on the rest of the property will not be more than 3% of the amount left.
The chancellor also confirmed plans to roll-out the starter homes initiative, with first-time buyers able to get a 20% discount. He said £2.3bn would be spent on building 200,000 such homes over the next five years.
Read more from the Source: London buyers get turbo-charged Help to Buy